Georgia shoppers at Amazon still aren’t paying sales tax, three weeks after the start of a state law designed to snag the money from the world’s biggest online retailer.
Shoppers buying items from Amazon.com to be shipped to Georgia should be prompted to pay sales tax under the law that took effect Jan. 1. But repeated checks of Amazon.com show that isn’t happening. [more in their Amazon fails to collect new Georgia tax article]
What exactly is AJC referring to? Well, there are nine states which have enacted the so-called “affiliate nexus tax” (or “Amazon tax”, as some call them) laws. Each state has its own requirements for merchants/advertisers, but a general rule of thumb is that out-of-state merchants/advertisers who in any given year exceed $10,000 sales threshold to customers residing in the tax law state in sales which have been referred through affiliates residing in the same state (e.g.: orders by New York state residents driven to the merchant by their NY-based affiliates) are subject to a sales tax [more in this article by a San José State University-based CPA].
These 9 states are:
- Arkansas (law passed in 2011)
- California (went into effect Sep 15, 2012 | work-around available)
- Connecticut (passed in 2011)
- Georgia (went into effect in July 2012)
- Illinois (passed in 2011)
- New York (passed in 2008)
- North Carolina (passed in 2009)
- Pennsylvania (reinstated Sep 1, 2012 | work-around available)
- Rhode Island (passed in 2009)
If you run an affiliate program, and have affiliates in these states referring sales to you, keep an eye on the volume of sales to state residents, or, better yet, collect the respective sales tax when sales are made to residents of these states — to be able to pay your state-specific sales taxes when they are due.